Outcry over Wal-Mart disclosure irrelevant

The lobbying disclosure report submitted by US retail giant Wal-Mart in Washington has given fresh fuel to the BJP and other opposition parties which are perennially on the lookout for some excuse or the other to raise a stink in the Parliament. So, no surprise that the disclosure report – which states that the retail major spent close to USD 25 million since 2008 on various lobbying activities, including on opening up of the retail sector in India – has sparked fresh political bickering with opposition members sloganeering against ‘bribery by Wal-Mart’ given that lobbying is illegal in India.

After losing face over the vote on FDI in Parliament last week, opposition parties are now citing this report to demand a roll back of FDI in multi-brand retail. Such knee jerk reactions are a reflection of the turbulent times we live in. For instance, Wal-Mart’s latest quarterly report states that the retailer lobbied for its case with the US Senate, the US House of Representatives, the US Trade Representative (USTR) and the US Department of State – and not to their Indian counterparts. This is a far cry from allegations of ‘bribery’ being leveled against the UPA government. Of course some of that money would have made its way into India too – but then such charges remain frivolous until conclusively proven.

The outcry over Wal-Mart’s disclosure report is irrelevant. After all, this is not some Wikileaks scoops. Wal-Mart has voluntarily made the disclosure public according to US law and regulations. The debate that the Wal-Mart lobbying disclosure should ideally have provoked in India is whether it is high time that lobbying was legalised in India. One can’t wish away lobbying simply by refusing to recognise or legalise it. In its non-legal form today, lobbying has simply given way to rampant corruption which has weakened the very fabric of our democracy.

In any case, corporate lobbying is not new to India. Scores of public relations firm and advocacy groups anyway are de facto ‘lobbying’ for their clients with journalists and politicians without putting it in as many words. The leaked tapes of corporate lobbyist Nira Radia, for instance, are an evident pointer towards how policy and pricing of government transactions are indeed decided by big companies. Tapes of Radia’s conversations about how the key telecom portfolio was allocated when the Union Cabinet was formed after the victory of the Congress-led UPA in May 2009 are now part and parcel of national conversation. The public notoriety she gained caused Radia to shut down her public relations firm last year, which boasted names such as the Tata Group and Reliance (Mukesh) group as key clients.

If lobbying were made legal in India, Radia and others of her ilk would certainly not disappear overnight from the political arena which is prone to influencing through money, power or sleaze. But what will happen is that specific interest groups will have a platform to come together and influence policy in their favour – and which will eventually promote greater transparency and accountability in the corporate system. For now, businesses in India only have recourse to bribery and influence as a means of getting favorable policies passed by India’s archaic political and bureaucratic machinery.

India could learn from and emulate the examples set by the US, Canada, Germany and France – where lobbying is legal. These countries have put in place appropriate legislations to regulate the conduct of lobbyists by making registration compulsory and prescribing obligating declarations.

Yes, there are those who oppose legalisation of lobbying in India on the ground that it is akin to legalising corruption. But there is a difference. Corruption is largely for getting undue benefits for a single party, while lobbying is for an interest group as a whole and could entail various policy measures such as reducing excise duty for an industry or allowing export benefits to a certain sector.

Needless to say, the biggest benefit of legalising lobbying is that whatever is happening behind shady curtains will then be out in the open. More importantly, lobbying disclosure reports filed by various big corporate houses will ensure transparency and accountability. In other words, we will exactly know what various interest groups are rooting for at any given point in time. And if the civil society disagrees with it – a free and open public debate on the issue can happen – instead of backroom wrangling between politicians and businessmen further fanning the crony capitalism that continues to stymie the system today.

(Disclaimer: The views expressed in the blog are that of the author and does not necessarily reflect the editorial policy of The Sunday Indian)